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Davidson gets rid of financial aid loans
2007-03-19
Davidson College announced Monday it will do away with loans when awarding need-based financial aid, a move school officials said would allow students to graduate debt-free. The liberal arts college had capped loan amounts in recent years to reduce student debt, but higher education experts said it's the only college of its kind to halt loan handouts in need-based aid packages, which also include grants and work study. Davidson will raise new money to pay for the grants and work opportunities that will replace loans, said John F. McCartney, chairman of Davidson's Board of Trustees. "The trustees are deeply committed to this new policy that will be funded entirely with new monies," he said. The announcement comes as education leaders across the country debate ways to prevent college campuses from welcoming only rich students. Elite universities such as Princeton and Columbia have eliminated or significantly reduced loans by awarding more grant money. Others, such as Harvard and Yale, pay for the amount of money lower-income families are expected to contribute based on federal financial aid calculations. And even public universities, such as the University of North Carolina at Chapel Hill, have stopped forcing loans upon the neediest students. Such policy changes are expensive, and they're rare among small, private liberal arts colleges. "It would have been nice to see what the effect of such an implementation would be, but there was no model out there," Davidson President Robert Vagt said, adding that officials had been looking at ways to reduce student debt for a long time. "We hope that kids will not just pass by Davidson because of the price tag," he said. Loans will still be available if students choose to finance their education that way, Vagt said. But he predicted students would embrace the new policy, citing examples of students who passed up opportunities after graduating because of their debt. "It forces them into a career decision," Vagt said. "They took higher-paying jobs rather than jobs they had their hearts set on." Tuition and fees cost about $30,000 at the college, which is located about 20 miles north of Charlotte. About a third of the school's 1,667 students receive need-based aid, including about $1.9 million worth of loans each year, officials said. Higher education experts applauded Davidson's move and predicted it might encourage other liberal arts colleges to follow suit. "To have an example like Davidson out there is enormously important," said David Warren, president of the National Association of Independent Colleges and Universities. Schools with the richest endowments are more likely to make such a policy change, Warren said, but he added that Davidson has less money in terms of endowment-per-student than some of its peer institutions. "It's a very bold and even courageous move," he said.
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